Current Account

Banking

A current account is a bank account designed for businesses and professionals with high-frequency transactions. It earns zero interest but offers unlimited transactions, overdraft facility, and no restrictions on cash deposits. Not suitable for personal savings.

In detail

Key differences from savings account:nSavings: interest 2.5-7%, daily transaction limits, for personal usenCurrent: zero interest, unlimited transactions, for business use, higher minimum balance (Rs 10,000-1L)nnUsed by: traders, businesses, freelancers with large cash flows, professionals with large tax compliance needs. Current account balance does not earn any interest -- any idle business cash should be swept to FD or liquid fund.

Real-life example

🇮🇳 India example

Riya runs a boutique with Rs 3-5L monthly transactions. She maintains current account for business (unlimited transactions, cash deposit facility, GST-linked). Personal savings in separate savings account. Current account idle cash of Rs 10L swept to FD earning 7%.

Frequently asked questions

Should a freelancer or self-employed person have a current account? ▼

Not always necessary. A savings account works if transactions are under Rs 50L/year. Above that threshold, current account makes more sense operationally. For GST registration, a current account is strongly recommended.